Asia stocks up as takeover talk in US drives Dow

Asian stock markets picked up stream Wednesday, driven higher by reports that another big corporate takeover might be in the works in the US. (Reuters)

SummaryAsian stock markets picked up stream Wednesday, driven higher by reports that another big corporate takeover might be in the works in the US.

Asian stock markets picked up stream Wednesday, driven higher by reports that another big corporate takeover might be in the works in the US.

A report that two major office supply retailers are in talks to combine their businesses sent the Dow Jones industrial average to a near-record high Tuesday. That news came on top of an $11 billion tie-up between American Airlines and US Airways, announced earlier this month, that will create the world's biggest airline.

Stock markets are often energized by speculation of takeovers. Aside from pushing up the share prices of the companies involved if the deal is regarded as a good one, investors also see big takeovers as a sign of confidence in the business and economic outlook.

Stocks were also boosted by data released Tuesday that showed German investor sentiment rising in February, way above market expectations. The index is now at its highest level for nearly three years, adding to the evidence suggesting Germany's economy will not fall into recession.

"Positive news in the form of a bigger than forecast rise in February German ZEW investor confidence helped to shore up market sentiment although perhaps the main message here is one of German outperformance rather than eurozone recovery,'' analysts at Credit Agricole CIB in Hong Kong said in a research note.

The Dow Jones industrial average rose 53.91 points to close at 14,035.67. The S&P 500 index rose 0.7 percent to 1,530.94. The Nasdaq composite rose 0.7 percent to 3,213.59.

That's despite the $1.2 trillion in automatic federal spending cuts that are scheduled to start March 1 unless Congress and the White House find a way to avoid them. Previous budget battles in Washington have rattled financial markets.

Benchmark oil for March delivery was down 2 cents to $96.64 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 80 cents to finish at $96.66 per barrel on the Nymex on Tuesday.

In currencies, the euro fell slightly to $1.3413 from $1.3416 late Tuesday in New York. The dollar fell slightly to 93.46 yen from 93.44 yen.